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You’ve probably heard over and over that it’s important to have a credit card or two and to use them responsibly if you want a high credit score. No doubt you’ve also been told that making monthly, on-time payments on your mortgage and car are other ways to keep your credit score healthy. All true.

Your credit score — for young adults perhaps just joining the credit conversation — is the number credit bureaus offer up as a symbol of your ability to repay a loan. Generally, the credit score number everyone is concerned with is the FICO credit score, which ranges from 300 to 850. The higher your score, the more likely lenders will allow you to borrow money, and the better the rate you’ll qualify for.

But what if you would like to see your credit score climb — but you’re not crazy about having a credit card? What if you live in an apartment and aren’t making mortgage payments? What if you live in the city and take the subway? What then? Here are some somewhat under-the-radar ways to build credit for those who prefer the road less traveled.

1. Use Your Rent Payments to Build Credit.

For most of credit and rental history, on-time rent payments haven’t officially counted as a sign of someone who is responsible with money. Things are slowly changing, however. Since 2011, Experian has included rent payments in consumers’ credit histories. But it isn’t automatic. If you want your rent payments to be included, you need to be proactive and opt in.

There are a number of websites that will send rental-payment information to the credit bureaus. Consumers who visit WilliamPaid.com can register and pay their rent through the site, and it’ll be reported to Experian (it’s free if you opt for electronic withdrawal; if you pay with a credit or debit card, it’s 2.95% of the total payment; if you pay in cash, a $10 flat fee).

2. Get a CD Secured Loan.

CD secured loans are typically extended by credit unions, precisely to help members build or rebuild credit reports and credit scores. Some community banks also offer them.

“The loan is approved for some small amount, normally not much more than $1,000,” says John Ulzheimer of CreditSesame.com. “But instead of the consumer getting that $1,000 like they would with a normal loan, the money is placed into an interest-bearing account with the credit union. The consumer makes payments monthly, and after a year or two, the loan is paid off, and the funds, plus dividends, are released to the consumer.”

Ulzheimer adds that because the loan was an extension of credit, the credit union can report the loan to the credit bureaus. “Everyone wins,” he says. “The consumer gets the benefit of the account on their credit reports, plus the loan proceeds with dividends.”

Miller suggests consumers check out Payment Reporting Builds Credit, a national company that has been around since 2002 and allows consumers to sign up for free and self-report payments like rent, rent-to-own purchases and utilities like your water or electric bill.

“PRBC might not yet have the clout of the big three credit bureaus, but a solid report from PRBC might be enough to get your foot in the door with a lender,” Miller says. The PRBC site is free to use, but not all self-reporting third parties are free.

Keep in mind that none of these strategies will work if you don’t pay your bills on time. In fact, you could make things worse by self-reporting if the information being reported shows you’re always late with bills. But if you are paying without trouble, and you simply don’t own a house or credit cards and aren’t making payments on car or student loans, then getting lenders to see that you’re consistently paying bills on time may just lead to a higher credit score — eventually.

“The quickest way to build up a favorable credit score is to borrow and pay back the debt on time. There really is no way around that,” Miller says.

“It isn’t necessarily hard — it just takes discipline,” says Hitha Prabhakar, a retail and consumer analyst based in New York City and a spokesperson for Mint.com, a free and well-known money management website.

Having a well-paying job also helps. A good relationship with your bank or financial institution is another plus, Prabhakar adds. But above all, a long credit history without a lot of black marks is what will really make all the difference.

If you trusted your son or daughter to keep track of their finances, and they slipped up, what in the world are you supposed to do?

Let’s say they’ve racked up a big, nasty credit card debt — to the tune of thousands of dollars. Should you pay off their debts to help keep their credit score above water? Or is it better to let them learn from their mistakes and suffer the consequences? Though each individual situation is different, here are your options, what’s at stake, and a few pointers to help you plot your course of action.

A Personal Loan, With a Contract

If you have the means, think about whether or not you want to loan your child the money. Sometimes the debt is manageable enough that you can pay it off in the form of a personal loan to your child. You can even decide to charge them interest as well, so they learn just how much a high APR can cost them.

But you have to examine the situation from a lender’s perspective, rather than simply write a check and expect your child will make payments. What is the child’s employment situation? Will he or she be able to make payments to you without the security blanket of your relationship making them complacent? Has your child typically been a responsible spender in the past, or does he or she impulsively purchase on a grand scale regularly? If you do decide to help protect their credit history, it’s a smart idea to sign a contract with your child to make your agreement more official and binding.

If You Co-Signed, You’re on the Hook

If you co-signed on your child’s account, you’re responsible for their debt. Because of regulations passed in the CARD Act of 2009, it’s more difficult for young adults to qualify for credit cards, so more and more parents are co-signing on accounts and acting as guarantors for their children. If you’ve already taken that step, you should hopefully have realized that your child’s purchases will affect your credit, regardless of your involvement.

In this case, it may be more prudent to pay off the debt if you can, cancel the account, and work together to come up with a payment plan to rectify the situation and make sure it never happens again. If you haven’t co-signed yet, sit down for a serious conversation with your child on your values and financial responsibility.

Lessons to Be Learned?

Bad credit now will impact their financial future later, but so will bad habits. If your child doesn’t learn from his or her mistakes now, there could be bigger and more damaging mistakes ahead. Will bailing your child out of their financial mess with creditors make them realize the gravity of their mistake? Or will you just end up fostering their sense of dependence on you? You won’t always be there, wallet in hand to save them, so if they can manage to take the credit hit, perhaps it’s best to let them learn the lesson this time, and give them some tough love.

Communication Is Key

Loaning money to someone you love is always, always messy. While your child should intellectually know that your love is unconditional (which is why your help comes so willingly), it’s emotionally very difficult to face your parents when you owe them money. Plenty of relationships have been ruined by debts of personal loans, both from neglected payments and feelings of shame. Be sure that if you choose to help your child, you commit to maintaining an open dialogue and doing your best to keep business and family separate.

Ultimately, each family and financial situation is different. But before you make a plan to tackle your son or daughter’s debt, you need to examine the situation from all angles. There are many factors in play, but above all, your relationship and your child’s sense of responsibility from this learning experience should be at the forefront of your mind.

Life doesn’t always go as planned, and many of life’s major events, like getting married, having a baby and buying a home can crowd your savings capability and even throw you into a financial tailspin.

When it comes to making ends meet, retirement is often left out of the savings equation. Eighty-four percent of people say saving for retirement has been undercut by a life event, according to this year’s HSBC Future of Retirement survey of more than 15,000 people. But people react differently when in crunch mode, the survey says, and in some cases, extreme measures are required to cover budget needs. Three tactics improve cash flow in a financial crunch: increase income, decrease expenses or a combination of both.

Time to Downsize?

In reality, you have more control on your spending side, particularly with flexible expenses like travel, entertainment, gifts and food. But if your financial woes seem irreversible, you may have to take a hammer to large expenses like housing.

In fact, 21% of women surveyed say they would downsize, compared to only 14% of men. And 31% of men say they would dip into their retirement savings to cover unexpected expenses.

Though experts concede downsizing may be extremely emotional, it’s more preferable than taking a chunk out of retirement savings. Actually, 29% of respondents say the financial strain of home ownership puts a real crimp in retirement savings.

If you have any questions about the home buying process, feel free to ask us! We know it can be an intimidating process at times, and we’re here for you. To apply for a 10, 15, or 30 year First Financial Mortgage – click here.* You might also want to subscribe to our mortgage rate text message service, by texting FIRSTRATE to 69302. When our mortgage rates change, you’ll be the first to know!**

Rethink Your Lifestyle.

Today’s lifestyle norms may have something to do with one-dimensional thinking. Items once seen as luxuries are now seen as necessities, says Ravi Dhar, director of the Yale Center for Customer Insights.

Plus, what people do with their money has more to do with psychological and emotional issues than it does with crunching the numbers, claims Marcee Yager, a retired certified financial planner. “It’s never just about the money.”

The idea that emotional understanding must be factored into financial decisions has gained very little traction, claims Yager. “Big investment banks don’t tend to make things soft and fuzzy.”

Dhar even questions the effectiveness of some system resources like the many online investment tools available to consumers. Calculators project four, six, or eight million dollar targets for a retirement 30 years into the future. He says the timeframe seems intangible and the goals unattainable.

For consumers looking to navigate their way out or steer clear of the financial weeds, experts offer the following:

Take small steps to wealth. The only way to build up reserves is to do it gradually. Budget a realistic portion of your paycheck to start an emergency fund or return to the basics. “The best thing people raising families can do is go back to the old traditional practice of putting money in an envelope or a cookie jar,” adds Yager.

Be flexible. Think about what’s possible to mitigate a tight financial situation. Baby boomers tend to be fearful of change, particularly of moving to unknown places, says Yager. In fact, new locales both in and outside of U.S. borders can create wonderful opportunities that improve your quality of life.

Keep a minimum three-month reserve for savings. Learn to cut corners, live on less and shop in cheaper places.

Write it down. Take a financial fitness quiz then put your pencil to paper. You need to see the numbers then monitor your day-to-day situation.

For a FREE and anonymous online debt management tool, try Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live!

First Financial also hosts free credit management and debt reduction seminars throughout the year, so be sure to check our online event calendar or subscribe to receive upcoming seminar alerts on your mobile phone by texting FFSeminar to 69302.**

Turn to professionals. Reviewing your savings situation and retirement potential with a professional financial advisor can help to ensure that all your future requirements are identified.

If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 866.750.0100 or stop in to see us!***

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. A First Financial Mortgage is subject to credit approval. See Credit Union for details. **Standard text messaging and data rates may apply.***Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC , a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

While the latest news proclaims that the economy is rebounding, the truth is that how Americans spend money is dismal. Spending is up, which is good for the economy — but can spell bad news for consumers on the individual level.

“Consumers who find themselves mired in debt are serving the larger economy at great personal sacrifice,” says Stuart Vyse, professor of psychology at Connecticut College and author of Going Broke: Why Americans Can’t Hold on to Their Money. ”The economy runs on consumption, and as a result, personal savings is never mentioned because it is considered counterproductive and a drag on the economy.”

According to the Employee Benefit Research Institute’s (EBRI) annual Retirement Confidence Survey, Americans are living longer — and they do not have anywhere near enough saved for retirement. In fact, the report found that the majority of Americans (57 percent) have less than $25,000 in total household savings or investments.

Where and How People Spend Money — Instead of Saving

Certainly the recent tough times have reduced disposable income and the ability to save, are there other aspects influencing how Americans spend money? Why can’t Americans seem to keep their money in their bank accounts?

1. Lack of education about budgeting, investing and saving for retirement.

“One of the main reasons that people don’t save money in the short or long-term is that they’re simply unfamiliar with concepts such as setting a monthly or annual personal budget and saving for retirement,” notes Andrew Schrage, co-owner of MoneyCrashers Personal Finance. Budgeting is important – and something everyone should be educated on and practice on a monthly basis.

First Financial provides a number of FREE educational seminars throughout the year on topics which include budgeting, retirement, and credit management. Visit our event calendar on our website to keep up-to-date on all of our seminars and to sign up online! If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 866.750.0100 or stop in to make an appointment at any branch!*

2. No emergency savings.

Too many people have experienced being out of work for long and short periods of time, have had a car breakdown, or a health crisis that an emergency fund could help cover.

“Despite how high a salary may be, one is likely to be broke due to the lack of preparation for emergencies. Emergency savings is the key to financial success and without it, you’re just making it more difficult to be financially stable,” says Xavier Epps, owner of XNE Financial Advising, LLC. According to the Bureau of Economic Analysis, Americans only saved 2.5% of their income on average for the month of April, Epps points out. “Consumers should aim to save much more in order to cover unexpected expenses and possibly job loss.”

3. High inflation.

Some personal finance experts point to inflation as a big factor in suppressing people’s ability to consistently add to their bank account. “Our government deficit spending has skyrocketed, and the main cost of that spending is weaker buying power for the dollar,” comments Brian Luftman, founder and president of American Farm Investors.

“Our government says inflation is at 3%, but Americans are paying significantly more for food, heating and cooling bills, gasoline and healthcare,” says Luftman. “All of those costs have virtually doubled since 2008, and very few Americans are making any more money than they were in 2008. I think real inflation is 10 to 15% a year, and I don’t see that changing.”

4. Overspending made easy.

Rachel Parrent, Vantage Credit Union’s Community Engagement Manager, says, “With social media like Facebook and Twitter and we can see what everyone in our own social circle is doing, what they are purchasing, and where they are eating, traveling and shopping. Many times it makes us believe that if they can afford it, so can we. People fall into bad habits like eating out regularly or thinking that spending a little here, a little there won’t amount to a lot by the end of the month. Credit cards and electronic purchasing make it much easier to spend than having cash in your pocket.”

These social pressures and the ease of spending combine to create an environment that “places enormous burdens on self-control” and how people spend money, says Vyse. “All of the barriers to consumption have been removed: you can shop 24-hours a day, with or without cash on hand. The urge to purchase something can be satisfied in minutes without ever leaving home.”

5. Taking on big, long-term loans.

“Perhaps the worst mistake people make is to assume large, long-term debt burdens that are difficult to escape without the certainty of enough sustained income to support them,” Vyse says. “In today’s world, the most common examples are student loans and mortgage loans.” Should circumstances change and the borrower is unable to make monthly payments towards these debts, there is no quick-fix solution. “If you have calculated incorrectly or if your income drops, these kinds of debts can have a dramatic effect on your life and well-being.”

Considering that the average American college student graduating in 2011 had accrued $27,000 in student loan debt, rising college costs definitely play a role in the ability to save. “By having to make significant monthly payments for student loans shortly after graduating, it can be virtually impossible to start an emergency fund or begin saving for retirement,” says Schrage. “It can even make staying on top of monthly bills a challenge, which often leads to credit card debt.”

Brian Frederick, JD, CFP of Stillwater Financial Partners adds that student debt doesn’t just affect younger generations, but parents as well. “I’m seeing more and more people sacrifice their own retirement savings needs and run up large credit card balances to fund their children’s college. This can result in credit card debt of $20,000 and up at high rates — without a lot of excess cash flow to pay down the debt, they just keep paying the interest and not a whole lot toward principal.”

Here are Some Tips to Jump-Start Your Bank Account:

The first step to gaining financial independence is putting away $1,000 for emergencies. Other financial experts recommend an even bigger emergency fund of three to six months of expenses, to act as a buffer.

Financial experts recommend going all out to eliminate everything but the basics to build up that emergency fund. That means cutting the cable off, cooking at home, trading the high-lease cars for low-cost transportation, hosting yard sales or finding another job to supplement your income. It’s drastic, but a necessary way to get through some tough times.

“Look for ways to cut or eliminate your monthly expenses and bills,” says Schrage. “Limit personal purchases only to those that you actually need, and clip coupons to save on groceries. All of these ideas should make for the ability to save at least a modest amount each month.”

In addition to limiting spending, Vyse advises cultivating a habit of saving. “The key is to make saving easy.” He recommends having a certain percentage of deposits automatically diverted to a savings account. “This way, money is saved no matter what else happens, and it does not require a deliberate action on your part.”

For more information on managing debt and getting on the right track to financial independence – try Debt in Focus, a free and anonymous online debt management tool from First Financial. In minutes, you’ll receive an analysis of your financial situation, gain financial tips by leading financial experts to manage your debt, and start living the life you want to live!

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC , a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Debt can be a heavy burden on anyone, no matter what their age, but increasingly, young adults are starting out deeper in the hole. A recent report from credit-score provider FICO shows that student loan debt has climbed dramatically for those ages 18 to 29, with average debt rising by almost $5,000 from 2007 to 2012.

The good news, though, is that young adults are taking steps to get their overall debt under control, reducing their balances on credit cards and their debt levels for mortgages, auto loans, and other types of debt. With 16% of 18 to 29-year-olds having no credit cards, young adults are getting the message that managing debt early on is essential to overall financial health.

With the goal of managing debt levels firmly in mind, let’s take a look at four things you should do to manage your debt prudently and successfully.

1. Get a Handle On What You Owe.

In managing debt, the first challenge is figuring out all of what you owe. By pulling a free copy of your credit report you’ll get a list of loans and credit card accounts that major credit bureaus think you have outstanding, along with contact information to track down any unexpected creditors that might appear on the list.

Once you know what you owe, you also have to know the terms of each loan. By making a list of amounts due, monthly or minimum payment obligations, rates, and other fees, you can prioritize your debt and get the most onerous loans paid down first. Usually, that’ll involve getting your credit card debt zeroed out, along with any high rate debt like private student loans before turning to lower rate debt like mortgages and government subsidized student loans. With your list in hand, you’ll know where to concentrate any extra cash that you can put toward paying down debt ahead of schedule.

Debt in Focus is the perfect anonymous online tool for those who need financial help but might not be open about their current financial situation or do not have the time to go to face-to-face counseling. In just minutes, users will receive a thorough analysis of their financial situation by answering a few questions, including powerful tips by leading financial experts to help control debt, build a budget, and start living the way you would like to.

2. Look for Ways to Establish a Strong Credit History.

Having too much debt is always a mistake, but going too far in the other direction can also hurt you financially. If you don’t use debt at all, then you run the risk of never building up a credit history, and that can make it much more difficult for you to get loans when you finally do want to borrow money. The better course is to use credit sparingly and wisely, perhaps with a credit card that you pay off every month and use only often enough to establish a payment record and solid credit score.

First Financial hosts free budgeting, credit management, and debt reduction seminars throughout the year, so be sure to check our online event calendar or subscribe to receive upcoming seminar alerts on your mobile phone by texting FFSeminar to 69302.*

3. Build Up Some Emergency Savings.

Diverting money away from paying down long term loans in order to create a rainy day emergency fund might sound counterintuitive in trying to manage your overall debt. But especially if your outstanding debt is of the relatively good variety — such as a low rate mortgage or government subsidized student loan debt — having an emergency fund is very useful in avoiding the need to put a surprise expense on a credit card. Once you have your credit cards paid down, keeping them paid off every month is the best way to handle debt, and an emergency fund will make it a lot easier to handle even substantial unanticipated costs without backsliding on your progress on the credit card front.
4. Get On a Budget.

Regardless of whether you have debt or how much you have, establishing a smart budget is the best way to keep your finances under control. By balancing your income against your expenses, you’ll know whether you have the flexibility to handle changes in spending patterns or whether you need to keep a firm grip on your spending. Moreover, budgeting will often reveal wasteful spending that will show you the best places to cut back on expenses, freeing up more money to put toward paying down debt and minimizing interest charges along the way.

Do you cringe every time you check the balance of your savings account? If the answer is yes, you’re not alone. According to Bankrate’s June 2013 Financial Security Index, 27% of Americans have no emergency savings fund, and just 24% of Americans have a savings cushion to cover at least six months of expenses.

Here are five easy steps toward a savings awakening:

1. Assess where your money is going.

Whether you’re looking to build up an emergency savings fund or contribute more to your retirement plan, saving more money starts with self-awareness.

That assessment can be a rude wake-up call to start setting a monthly budget, a move that is difficult at first with the need to get spending under control.

The era of mobile apps and online banking alerts can help you overcome those initial fears. 24/7 online and mobile access and a range of different mobile applications make tracking your spending easy.

2. Eliminate unnecessary spending.

Once you have a budget in place, it’s time to look for opportunities to reduce your overhead costs.

Cutting that spending can rely on small steps, too. The Bankrate lunch savings calculator shows that even something as simple as taking your afternoon meal to work each day rather than eating out, can add up to big savings over time. Consider recurring charges such as your cable or phone bill to determine if there are alternative plans that can trim your expected monthly expenses.

Another way to shrink spending is to alter the way you pay for purchases on your shopping trips. Research conducted by Promothesh Chatterjee, assistant professor of marketing at the University of Kansas School of Business, and Randall Rose, professor of marketing at the University of South Carolina’s Moore School of Business, found that consumers spend less when they use cash rather than credit cards.

3. Set your saving goals.

You can’t get somewhere if you don’t know where you’re going. Your savings goal does not have to be huge.

Come up with a realistic amount that you can easily adjust into your budgeting pattern, and then increase that amount over time – as much as you can.

4. Jump start your savings with extra cash.

As soon as your paycheck arrives, it’s time to save. You can also pay yourself first when unexpected cash flows into your savings account. Also look for opportunities to jump-start a savings plan with tax refunds or year-end bonuses.

5. Give yourself regular check-ups.

Having a healthy savings account is just like maintaining your physical health. Many Americans are failing to keep this scorecard. According to a 2012 survey conducted by the American Institute of CPAs, just 17% of young adults monitor their bank accounts on a daily basis, and 4 out of 10 adults never check their retirement account balances.

Here at First Financial, we encourage our members to come in at least once a year for a financial check-up and sit down with a representative at any one of our branches to make sure you are currently placed in the correct Rewards First tier for you, and also that you are receiving the best value, products, and services based on your financial situation. Give us a call or stop in to see us today!

First Financial also offers free budgeting seminars throughout the year. Keep an eye out for future seminars and register online by visiting our event calendar. You can also receive seminar updates on your mobile phone by texting FFSeminar to 69302.*